Facebook Blogging

Edward Hugh has a lively and enjoyable Facebook community where he publishes frequent breaking news economics links and short updates. If you would like to receive these updates on a regular basis and join the debate please invite Edward as a friend by clicking the Facebook link at the top of the right sidebar.

Friday, April 11, 2008

Romanian Wage Growth February 2008

Romanian net wage growth, which the central bank says is a main driver of inflation this year, slowed in February compared with January, when the government gave pay increases to public employees. Net wages rose at an annual 20.5 percent rate, as compared with a 30.7 percent in January, bringing the average net monthly wage to 1,134 lei ($493), according to data from the Bucharest-based National Statistics Institute this morning. Month on month net wages fell back 5.7 percent from January's high.

Central bank Governor Mugur Isarescu said on April 9 that rising wages are a main threat to inflation this year and may spur a ``second round'' of price increases in coming months.

Romanian inflation in February accelerated to an annual 8 percent, the fastest pace in two years, prompting the central bank to increase its main interest rate in March to 9.5 percent.


The recent settlement in the Dacia strike gives some indication of how extensive the labour supply problem now really is in Romania. basically Employees of Dacia, which is the Romanian carmaking unit of France's Renault today ended an 18-day strike at their Pitesti plant - located about 100 kilometers northwest of Bucharest - after accepting a higher pay offer.

The 13,000 employees returned to work this afternoon after accepting a monthly pay increase of 360 lei ($158). Dacia employees started the strike on March 24, halting production of 1,300 cars a day from the factory, to back demands of a wage increase of 550 lei a month each. This pay increase brings the average wage of a Dacia employee to 2,256 lei a month before tax. The company had originally offered a raise of 155 lei per month per employee. Dacia's sales increased 17 percent last year to 230,000 vehicles as it boosted exports to France and Germany and Romanian wages and lending soared, giving citizens more purchasing power. Average net wages increased an annual 20.5 percent in February.

Dacia, which has more than a 30 percent share of Romania's car market and exports Logan sedans worldwide, produces more than 1,300 vehicles per working day at its Pitesti factory. Dacia is also a main Romanian exporter, with exports rising 44 percent last year from 2006 to more than 128,000 cars, the company said.

And here's another one:

GALATI, Romania, April 16 (Reuters) - Workers at Romania's top steel mill, owned by steel giant ArcelorMittal (ISPA.AS: Quote, Profile, Research), ended a two-day strike on Wednesday after a local court ruled their protest was illegal.

Trade unionists said the strike had halved production at the eastern Romanian facility. The company declined to comment.

Around 4,000 workers or one third of the plant's workforce started the protest this week, asking for a 30 percent increase in wages, now at 950 lei ($416) after-tax.

The strike followed three weeks of protest at a plant owned by French Renault (RENA.PA: Quote, Profile, Research), which agreed to raise employees' wages by around 23 percent on average in 2008.

"Striking workers returned to work following the court decision to suspend the strike for 30 days. But if our demands are not met, we will use all legal weapons to accomplish them," trade union leader Ilinca Diaconu told Reuters.

Management had offered a 9.5 percent pay increase.

Wage pressures are on the rise IN Romania, which joined the European Union last year, as the economy grows robustly.

Economists warn that double-digit percentage salary increases in the private sector and insufficiently restrictive fiscal policy are fanning consumption and inflation, threatening long-term economic stability.

No comments: